As fears of a hard Brexit mount, UK Treasury chief Philip Hammond has cut Britain’s growth outlook for 2017 to 1.5% from 2% and for 2019 to 1.3% from 1.7%. Hammond admitted in his budget speech that a hard Brexit—Britain leaving the EU with no formal trade or other agreements—is a possibility. In that scenario, Britain would likely face severe economic consequences, at least in the short-term.
Some 44% of British exports go to the EU, and in the absence of a trade deal, the flow of goods would almost certainly decline. Britain may be able to negotiate new trade agreements with other countries, but it will be hard to replace the volume of exports it stands to lose for a few years at least.
Britain is due to leave the EU in March 2019. It’s hard to predict how Brexit negotiations will play out over the next fifteen months, but the consequences of Britain’s decision to leave are likely to be with us for several years to come.
I also wanted to let you know that our next Global Share Portfolio webinar is coming up on Tuesday, 28 November at 12:30 pm. Alec Hogg will be taking a look at how the portfolio has performed and what changes may be afoot.